|Frost & Sullivan Research Service||Published: 11 Mar 2010|
This Frost & Sullivan research service titled Analysis of U.S. Speciality Funds – Utilities provides an in-depth analysis of the market drivers and restraints, industry trends, and competitive environment in addition to the challenges and issues faced by market participants. In this research, Frost & Sullivan's expert analysts thoroughly examine the following: mutual funds, exchange traded funds, and private equity.
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Accent on Renewable Energy and Strong Regulatory Support Spur Investments in U.S. Speciality Funds – Utilities Sector
Specialty funds – utilities currently have a minuscule share (0.3 percent) as of March 2010 in the total mutual funds asset under management in the United States. Specialty funds are expected to be in the limelight in the future due to the massive investments planned in the utilities sector. There is tremendous governmental support, regulatory and technological push toward investments in the utilities sector in the United States. This is likely to attract investor interest in specialty funds – utilities, and companies in this domain are focusing on expediting efficiency and reducing costs. Adequate emphasis has been placed on investments in construction, transmission, and distribution infrastructure. According to the National Venture Capital Association, clean technology is likely to witness a 54.0 percent growth in venture capital (VC) investments in 2010. The rise of VC investments was witnessed in 2009; being a sub-sector of the energy segment, utilities will benefit from the trend. "Escalating raw material prices are encouraging utility companies to secure energy resources and obtain upstream integration via joint ventures as well as mergers and acquisitions," notes the analyst of this research service. "Many changes in technology such as advanced metering infrastructure and smart grids are expected to ramp up energy efficiency." The utility companies are also striving to enhance the productivity and value of their business operations by outsourcing their back office operations.
Although the overall market scenario looks upbeat, there are some challenges clouding the landscape. The current economic predicament has created difficulties in accessing finance. Poor economic conditions and ambiguities in project costs are discouraging investments, and investors are adopting a wait and watch approach. Moreover, uncertainty in project cost and inability to pass the costs to the consumers have deterred investments. Companies are facing a shortage of engineering procurement contracts (EPC), and many projects are bogged down by difficulties in implementation and execution. Paucity of skilled labor is another factor causing angst in the utilities sector as expanding ageing workforce is approaching retirement in the next five to ten years.
Hazy regulations have also complicated matters and issues surrounding climate change, renewable energy, and replacement of ageing infrastructure have come to the forefront. "The U.S. Department of Energy has announced various stimulus packages and loan guarantees to encourage investments in energy efficiency," explains the analyst. "By the end of 2012, the U.S. government expects 10.0 percent of the total electricity generated to be renewable and 25.0 percent by 2025; this will rev up renewable energy investments." For participants in this space, growth opportunities abound in new capacity generation, distribution infrastructure, smart metering, technological investments, and upgradation of ageing infrastructure.
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
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|Table Of Contents|
1. Research Scope
2. U.S. Specialty Funds - Utilities
2.2 Market Participants
2.3 Market Share Analysis
2.4 Evolution of U.S. Specialty Funds – Utilities
2.5 U.S. Specialty Funds – Utilities: Risk-return Matrix
2.6 Sharpe Ratio Analysis
2.7 Alpha Ratio Analysis
2.8 Expense Ratio Analysis
2.9 Average Turnover Ratio Analysis
2.10 Mutual Fund Performance
2.11 Performance of the Top Five Mutual Fund Market Participants
2.12 U.S. Specialty Funds – Exchange-traded Funds
2.13 Performance of the Top Five Exchange-traded Funds
3. U.S. Utility Industry – Industry Challenges, Market Drivers and Restraints
3.1 Industry Challenges
3.2 Market Drivers
3.3 Market Restraints
3.4 U.S. Utility Industry Investment Opportunities
3.5 Venture Capital Investment in Energy Sector
3.6 Private Equity Investment in Energy Sector
3.7 U.S. Utility Industry Mergers and Acquisitions
4. U.S. Utility Industry – Financial Snapshot
4.1 U.S. Utilities Industry – Overview
4.2 U.S. Utilities Industry – Snapshot
4.3 Utility Companies in the top 25 Investments of U.S. Specialty Funds - Utilities
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